IMPLICATIONS OF DEMAND AND SUPPLY FOR AGRICULTURAL PRODUCTION

1. Implications of Demand and Supply for Agricultural Production
2. Price Support and its Effects on Agriculture
3. Price Control and Effects on Agriculture
4. Subsidy and its Effects on Agriculture
5. Reasons for Farm Subsidies

Implications of Demand and Supply for Agricultural Production

1. When the demand for a farm produce exceeds supply, price tends to rise.
2. When the demand for a farm produce is lower than the supply, the price falls.
3. Increase in the income of the consumer will make them demand for more farm produce vice versa.
4. Increase in the price of produce may lead to low demand for it and shift to the close substitute that has a lower price.
5. High cost of production may lead to low output, low supply and high prices of produce and vice versa.
6. Supply of farm produce will be low when environmental factors for production are unfavorable and vice versa.
7. High cost of farm inputs may lead to low supply and high cost of farm produce and vice versa.
8. If the taste of consumers is in favor of a product, the demand and price of such produce will increase and vice versa.
9. Increase in the number of producers will lead to increase in supply and reduction of price and vice versa.

Price Support and its Effects on Agriculture